THERE ARE LESSONS FOR AMERICA TO BE LEARNED FROM THE CRISIS IN GREECE

Senator Bernie Sanders

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Americans have the luxury of viewing the drama surrounding the Greek vote to reject a European Union bailout
of their bankrupt economy with some detachment. If Greece goes
bankrupt, few American financial institutions are directly affected in
even a minor way. The consequences for European unity and the future of
the Euro currency are not unimportant to the global economy but, again,
that is not something that will have immediate consequences for the
United States. But the Greek crisis does teach us a lesson and we have
Senator Bernie Sanders to thank for a reminder yesterday as to why
Americans should not only care about what is going in Greece but should
take a lesson from their folly.
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By endorsing the decision of a large majority of Greek voters
to, in essence, keep spending without being compelled to pay their
debts, the increasingly popular left-wing challenger to Hillary Clinton
highlighted a basic difference between Democrats and Republicans about
our own looming entitlement spending crisis heading into 2016.
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Let’s specify that Greece’s situation is not directly comparable to
the ongoing debate as to how to stop adding to the national debt that
has grown exponentially on President Obama’s watch, adding to the
admittedly dismal records of most of his recent Republican and
Democratic predecessors. Though some politicians, like Rep. Paul Ryan,
have sought to highlight the impending fiscal catastrophe unless
entitlement spending is reined in, common sense on this issue has been
hard to find. Out-of-control spending is a bipartisan affliction, but
Democrats have consistently sought to derail debates about how to cap
entitlements into partisan rumbles in which Republicans are depicted as
wishing to throw wheelchair-bound grandmothers over the cliff. The
result is that we continue to spend money that we don’t have (or rather
have borrowed from China) but to add to the problem by creating new
entitlements such as ObamaCare subsidies that may have a noble purpose
but have also massively expanded the scope of government spending and
power.
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Americans are by nature an optimistic people, and many of us continue
to think that we can grow or tax our way out of any problem we create.
Growth is essential to the country’s future. But taxes that will depress
an economy that continues to struggle despite an anemic recovery (while
strengthening government) are not a sensible solution. While we can
debate the right answers to the problem, what should not be in dispute
is that Americans cannot afford to walk blindly into the future
compiling debts that our children and grandchildren will be forced to
pay. Nor can we continue to increase the burden of entitlement spending
which ultimately compels the nation to sink further into debt.
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That is why the Greek fiasco is so instructive for America’s own political debates. As our John Steele Gordon explained here last week,
in essence, Greek voters have decided that they want to have their cake
and eat it too. Having compiled debts via massive spending on
entitlements of various kinds that they couldn’t pay for, the Greeks
demanded that the rest of Europe bail them out. However, when presented
with a bill for this assistance in the form of economic reforms that
compelled them to live within their means, they cried foul. In the Greek
context, a much-needed austerity program is viewed not as a necessary
corrective to irresponsible spending, but as a form of oppression being
imposed on them by wicked Germans. Though it is 70 years since the end
of the Second World War, the Greek people, like many others, have a
right to view the Germans with skepticism. But this dispute has nothing
to do with the crimes of a previous generation and everything do with
the question of whether some Europeans will be forced to pay for the
profligacy for others without the irresponsible parties having to change
their ways.
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While our immediate situation isn’t quite so dire as that of Greece,
Americans, too, continue to pile up debt while expecting others to pay.
That happens in cities and states across the country where public
employee contracts threaten to send municipalities into bankruptcy. And
it is happening on the federal level as we continue to spend on a
growing list of entitlements that cannot possibly be sustained in the
future except with ruinous taxes that will cripple the economy.
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The response to this problem from liberal Democrats like Bernie
Sanders is very much like that of the Greek voters who don’t think they
should balance their national checkbook or to stop spending other
people’s money to give themselves what they want. The left says keep
spending, break up financial institutions, and tax the businesses and
investors who provide the engine for growth in order to pay for an
ever-expanding government.
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Though Sanders won’t be elected president next year, he is clearly in
position to make a decent showing in some of the Democratic primaries.
Consequently, he is pushing Hillary Clinton farther and farther to the
left as she tries to compete with Sanders for the votes of Democrats who
would probably prefer to nominate Senator Elizabeth Warren. That puts
Clinton and other Democrats in a position where they will continue to be
an impassible obstacle to the kind of entitlement reform the United
States desperately needs no matter who wins the 2016 elections.
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Rather than merely observing the agony of Europe and Greece with
bemused indifference, Americans should think seriously about our own
future. We’re a long way from being Greece, but the principle remains
the same. The shift to the left among Democrats is an ominous sign that
the notion of fiscal accountability is one that is equally applicable to
American politics as it is that of Greece. We ignore the willingness of
Sanders and other liberals to demagoguery about Europe at our peril.
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There are at least two causes of the Greek crisis – one is spending
and the other is the failure of the Greek taxation system. For many
years I have been hearing from American businessmaen and tourists that
when they made reservations at Greek hotels, or when they arrived to
check in, they were given two prices – one price if they wanted to use a
credit card and a second, much lower price, if they were willing to pay
cash. The reason for this was obviously that cash payments were
welcomed, even at luxury hotels, so that the payment of taxes could be
avoided. Perhaps this was symtomatic of a tax collection failure
throughout the Greek economy. Our so called entitlement problems are
easily solved – for example, by raising the eligibility age for Social
Security or raising the income cap on the application of the Social
Security tax. Our problems are not a reflection of the Greek problems.
Rather, we should be encouraged that we are on the right track.

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About Me

A Texan who loves the truth and hates the lying, cheating, and deliberate prevarication that characterizes so much of our civic discourse these days.
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RIPOSTE, n. 1. Fencing: a quick thrust after parrying a lunge 2. a quick sharp return in speech or action; counterstroke.
- The Random House Dictionary of the English Language...........
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